Delphi Financial Group Inc. (DFG) announced yesterday the issuance of $250 million of its 7.875% senior unsecured notes.
The net proceeds from this offering will be used for general corporate purposes, including the repayment of corporate debt, which may include the repayment of debt outstanding under the existing revolving credit facility.
The notes will mature on Jan. 2020, and interest will be paid semi-annually in arrears. The notes will be unsecured and unsubordinated general obligations of Delphi, and will rank equal in right of payment with all existing and future unsecured and unsubordinated senior debt. These will be senior in the right of payment to all existing and future subordinated debt.
Bank of America, Merrill Lynch — now a unit of Bank of America Corp. (BAC) — and Wells Fargo Securities — a unit of Wells Fargo & Co. (WFC) 00 are acting as joint book-running managers for the issue. Standard & Poor’s and Moody’s have conferred a “BBB” and “Baa3″ rating on the notes, respectively.
Delphi has a low long-term debt to total financial capital ratio, which stood at 23.5% at Sept. 30, lower than 26.1% at the end of 2008. Fixed charge coverage ratio also stands favorably at 4.60X as of Sept. 30, 2009, up from 3.2X at the end of 2008. Last month, rating agency A.M. Best affirmed the financial strength rating of “A’ for the company, with a negative outlook.
Earlier during Aug 2009, Delphi issued 3 million shares, raising $63 million funds, bolstering its capital levels and strengthening its financial flexibility.
Delphi competes with Conesco Inc. (CNO), Stancorp Financial Group Inc. (SFG) and American Equity Investment Life Holding Co. (AEL).
Read the full analyst report on “DFG”
Read the full analyst report on “CNO”
Read the full analyst report on “SFG”
Read the full analyst report on “AEL”
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